Gilbane Development buys Bronx affordable rentals from Spencer Equity valued at $39.6M, part of $107.5M portfolio

Gilbane Development acquired an interest in three affordable multifamily properties from Joel Gluck’s Spencer Equity Group valued at $39.6 million that are part of $107.5 million portfolio transaction, according to an article from Crain’s. These are the first properties to be recorded in the transaction, according to a PincusCo analysis. These three sales occurred in three separate transactions. The signatory for the buyer entity in one of the transaction was Fazeela Siddiqui, an executive with the nonprofit Settlement Housing Fund.

In the largest transaction, Gilbane Development through the entity Pja Housing Development Fund Corporation acquired an interest from Spencer Equity Group through the entity Watermark Equity LLC valued at $21.5 million for the 54-unit residential elevator building (D1) at 101 East 165th Street in Highbridge, Bronx, 54-unit residential elevator building (D1) at 103 East 165th Street in Highbridge, Bronx, and 35-unit residential elevator building (D1) at 1140 Woodycrest Avenue in Highbridge, Bronx.
The deal closed on December 8, 2022 and was recorded on December 23, 2022. The three properties have 158,108 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $136 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
Crain’s first reported on the sale, which has a total transaction price of $107.5 million.

In the second transaction, Gilbane Development through the entity Pja Housing Development Fund Corporation acquired an interest from Spencer Equity Group through the entity Spencer Equity Group LLC valued at $9.9 million for the 79-unit residential elevator building (D1) at 1105 Jerome Avenue in Highbridge, Bronx. The deal closed on December 8, 2022 and was recorded on December 23, 2022. The property has 92,600 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $106 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)

In the third, Gilbane Development through the entity Pja Housing Development Fund Corporation paid $8.2 million to Spencer Equity Group through the entity 2363 Southern Blvd., LLC for 72-unit residential elevator building (D1) at 2363 Southern Boulevard in Belmont, the Bronx. The deal closed on December 8, 2022 and was recorded on December 23, 2022. The property has 60,900 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $135 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.) The seller bought the property on December 21, 2006, for $3.8 million.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 101 East 165th Street.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Gilbane Development had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Spencer Equity Group had not purchased any other properties and had not sold any properties over the same time period. The former owner according to the Department of Housing Preservation and Development is Dov Guttman, head officer. The business entity is Alliance Housing Associates. The three properties with a total of 158,108 square feet of built space generated revenue of $2.4 million per year or $15 per square foot. The sale price per square foot was $136.

The property

The 101 East 165th Street parcel has frontage of 125 feet and is 87 feet deep with a total lot size of 11,036 square feet. The lot is irregular. The zoning is R7-1 which allows for up to 3.44 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $2.2 million.The most recent loan totaled $11.2 million and was provided by New York Community Bank on December 10, 2019.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received one DOB violation, 115 housing violations, $300 in OATH penalties, and one housing litigation in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The block

On the tax block of 101 East 165th Street, PincusCo has identified the owners of five of the eight commercial properties representing 221,884 square feet of the 221,884 square feet. The largest owner is Joel Gluck, followed by Gilbane Development and then Dov Guttman.
On the tax block, there was one new building construction project filed totaling 7,264 square feet. It is a 15-unit, 7,264-square-foot R-2 building developed by Shaya Seidenfeld with plans filed September 14, 2020 and permitted October 5, 2021.

The majority, or 69 percent of the 221,884 square feet of built space are elevator buildings, with walkup buildings next occupying 31 percent of the space.

The seller

The PincusCo database currently indicates that Spencer Equity Group owned at least 12 commercial properties in New York City with 545,233 square feet and a city-determined market value of $51.7 million. (Market value is typically about 50% of actual value.) The portfolio has $415.8 million in debt, with top three lenders as Madison Realty Capital, Sterling National Bank, and Santander Bank respectively. Within the portfolio, the bulk, or 91 percent of the 545,233 square feet of built space are elevator properties, with walkup properties next occupying 9 percent of the space. The bulk, or 83 percent of the built space, is in Brooklyn, with Bronx next at 11 percent of the space.

The buyer

The PincusCo database currently indicates that Gilbane Development owned at least 11 commercial properties in New York City with 283,061 square feet and a city-determined market value of $16.8 million. (Market value is typically about 50% of actual value.) The portfolio has $32.2 million in debt, borrowed from City of New York. Within the portfolio, the bulk, or 56 percent of the 283,061 square feet of built space are walkup properties, with elevator properties next occupying 44 percent of the space. They are all located in Bronx.

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